Same-store sales fell 2.7 percent in February, according to the latest MillerPulse survey, as traffic declines that have dogged the industry for much of the past year continued unabated.
The biggest factor in the decline was one fewer day in February. Restaurants had their strongest performance of 2016 last February, when they got a benefit from Leap Day.
Yet sales continue to worsen, even when that day is taken into account, suggesting that a combination of consumer skittishness and other problems are keeping consumers from dining at restaurants.
On a two-year basis, which factors out the impact of Leap Day, same-store sales declined 0.7 percent in February, the second straight decline, and worse than the 0.5-percent decline in January. That was also the worst two-year same-store sales figure since the survey began reporting same-store sales in 2013.
“We expected a pretty rough first quarter,” said Larry Miller, co-founder of the survey. “It’s going to be a low point for the year.”
That is the sense among operators, who continue to be at least somewhat hopeful that sales will improve as the year goes on and comparisons ease. Operators’ outlook for improving same-store sales hit levels not seen in three years, according to the survey.
On top of that, other factors in February could have pulled sales down. Delays in tax refunds could have pushed some restaurant sales into March and April. There was also “a lot of noise” between calendar shifts and bad weather.
All of these factors could portend improvement in the coming months.
“You have easier comparisons, the economy is in decent shape, you have tax reform, potentially,” Miller said. “There are things to look at, so things are getting better.
“But consumer spending has been a little bit sluggish despite the decent job numbers. Do the math and it doesn’t quite all add up. Numbers are not great. It’s a show-me thing at this point.”
And the industry forecast for the year remains bleak. Miller said the two-year trend would have to improve 50 to 60 basis points every quarter for the year to end on a positive note.
“Sales could be negative for the first time since 2009,” Miller said.
Restaurant industry same-store sales have been down in eight of the past nine months, according to the monthly index. Traffic has been the biggest problem, having declined all but three months in the past two years.
Traffic declined 3.7 percent in February.
The issue was more pronounced at quick-service restaurants, where same-store sales declined 3.3 percent and traffic fell 4.8 percent. By comparison, casual-dining same-store sales declined 2.6 percent and traffic fell 2.1 percent.
February’s normal size hurt quick-service chains the most. On a two-year basis, quick-service same-store sales still outperformed casual dining, declining 0.3 percent, compared with a 1-percent decline for casual dining.
Two-year same-store sales have fallen for five straight months at wait-service concepts. They have fallen for two straight months at quick service. That’s the longest such streak for both sectors since at least 2013, when the index began breaking out the figures.
Contact Jonathan Maze at [email protected]
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